Netflix's Continued Evolution as a Game-Changer

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Netflix is proving it is not short on creativity and innovation; traits especially necessary in quickly evolving markets such as entertainment delivery. The thought of movies premiering on Netflix at the same time as they premiere in theaters is intriguing. Netflix has proven itself to be an innovative and game-changing business both with DVD delivery and, now, its streaming service, so nothing should be off the table.

This probably is not something we will see in the immediate future. I am glad to see these ideas being considered by Netflix, however, because the industry is evolving in a direction similar to what Netflix seems to be envisioning with TV and movies. (Perhaps it is moving that direction because of Netflix.) The successes of Netflix's House of Cards and Orange is the New Black certainly are a great start, and likely will lead to more original programming from Netflix in TV and other forms. Perhaps in a few years we will see a movie produced by Netflix premiering both in theaters and on the web.

As someone invested in Netflix, Imax, and Lions Gate Entertainment, I am very interested to see where this leads over the next several years. Businesses that resist the changing field or ignore innovations will have a difficult time thriving (or even surviving) in the evolving environment of entertainment production and delivery.

Netflix made a splash this year by creating its own TV shows and delivering them over the Web. Now it’s toying with the same idea for movies.

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Now Netflix is floating the idea that it will foot the bill for a “big” movie, which would appear in theaters and on Netflix at the same time. During the company’s earnings call last week, content boss Ted Sarandos said the company was interested in breaking into movies, and that investors should “keep [their] mind wide open to what those films would be and what they would look like.”

This weekend, Sarandos got more explicit. In a speech hosted by Film Independent, the nonprofit behind the indie film Spirit Awards, Sarandos said Netflix could start delivering new movies to its subscribers by doing the same thing it has done with its original TV shows, and becoming a first-run distributor.

“What we’re trying to do for TV, the model should extend pretty nicely to movies. Meaning, why not premiere movies on Netflix, the same day they’re opening in theaters? And not little movies — there’s a lot of ways, and lot of people to do that [already]. Why not big movies? Why not follow the consumers’ desire to watch things when they want?” ... As with iTunes, Netflix streaming is not as lucrative for movie studios as the more traditional distribution channels, but viewers are willing to pay a small price to legally consume media. Netflix actually checks piracy sites to see what consumers want but can't legally get when it decides which shows to buy.

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Netflix started producing its own award-winning shows, such as House of Cards and Orange Is the New Black. It has also talked about producing its own feature films, documentaries, and stand-up comedy shows.

The next logical step is releasing its own big feature films in theaters and on Netflix on the same day. This is what Ted Sarandos, Netflix's head of content, said in a speech for Film Independent (via Peter Kafka at AllThingsD).

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Whether you go to a theater or you stay at home to watch a movie should be your choice, the company says. Sarandos also pointed out that some independent movies already go to other distribution channels, such as iTunes, at the same time as the theater release.